Randgold profit gains in first quarter

Johannesburg – Randgold Resources says it has made a
strong start to its new financial year.

For the first quarter – which encompasses the three
months to March – production was up 10 percent year-on-year, it said on
Thursday.

The company notes gold production came in at 322 470 ounces,
while profit increased 33 percent to $84.9 million and total cash costs
decreased by 4 percent to $619/oz.

However, the group did not match the previous quarter’s
record results, with gold production down 15 percent, profit down 10 percent
and total cash costs up 13 percent on this comparison.
Despite this cash continued to increase, rising by 16 percent to
$600 million, with no debt.

Earlier this week, shareholders approved a 52 percent
hike to $1 per share in the annual dividend.
CEO Mark Bristow says the first quarter of the year was always a particularly
busy one for Randgold and the past one had been no exception.

Despite work stoppages that impacted operations at both
the Loulo-Gounkoto complex in Mali and Tongon in Côte d’Ivoire, and the
continuing ramp-up to full production at Kibali, the group’s overall
performance was its best for several years, the company says.
“Loulo-Gounkoto produced another solid operating quarter, marked by high
recoveries, and Tongon delivered a steady performance, with good cost
control. Kibali is tracking its guidance as it works towards the full
commissioning of its underground operation later this year.

“Morila continued to optimise its tailings retreatment
operation and is finalising approvals for the mining of its Domba satellite,
provisionally scheduled to start in September this year,” he says.

Bristow notes Randgold has succeeded in effectively replacing its reserves at a
higher grade last year despite depletion by record production.

Brownfields exploration is continuing to expand its
existing asset base while its greenfields exploration teams are delivering
exciting new prospects in line with Randgold’s aim of developing three new
projects over the next five years, the company says.

Strong cash flows from its existing operations would
support the company’s objective of sustainable profitability, reinforced by its
ongoing exploration commitment, a 10 year business plan at $1 000/oz, and
a robust balance sheet capable of funding new developments, it adds.
“The past quarter’s work stoppages, which disrupted our usually stable
industrial relations climate, prompted us to take a fresh look at this aspect
of our business and we are rolling out a potent internal campaign designed to
ensure that the company’s distinctive DNA is fully shared by all who work here
through fostering an inclusive culture of two-way communication and engagement
that takes in all levels in the organisation,” Bristow notes.